UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
Harvest Restaurant Group, Inc.
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
(Including the associated common stock purchase
rights)
(Title of Class of Securities)
417905 10 6
(CUSIP Number)
John D. Feltman
91 West Paces Ferry Road
Unit 3
Atlanta, Georgia 30305
(404) 261-4974
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 14, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box |_|.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 417905 10 6
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
John D. Feltman
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|_|
(b)|_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIAL7Y OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER
382,870 shares of common stock beneficially owned;
353,419 shares that the filer has the right to acquire pursuant to options.
8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
382,870 shares of common stock beneficially owned;
353,419 shares that the filer has the right to acquire pursuant to options.
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
736,289
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Item 1. Security and Issuer
This statement relates to the Common Stock, par value $.01 (the "Shares")
of Harvest Restaurant Group, Inc. (the "Company"), the principal executive
offices of which are located at 2662 Holcomb Bridge Road, Suite 320, Alpharetta,
Georgia 30022.
Item 2. Identity and Background
This statement is being filed by John D. Feltman ("Purchaser"), the
Chairman of Brookhaven Capital Corporation, the principal business of which is
corporate finance services. Purchaser's business address is: 91 West Paces Ferry
Road, Unit 3, Atlanta, Georgia 30305.
During the last five years, Purchaser has not been (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) a party to a civil proceeding or a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree, or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
Item 3. Source and Amount of Funds and Other Consideration
The consideration was the exchange of common stock of TRC Acquisition
Corporation ("TRC"), a Georgia corporation, that merged into a subsidiary of the
Company in a forward triangular merger on January 14, 1999, for common stock of
the Company.
Item 4. Purpose of Transaction
The purpose of the transaction was to effect the merger of TRC with and
into a wholly-owned subsidiary of the Company on January 14, 1999 in a forward
triangular merger. As a result of the merger, the former shareholders of TRC now
own 50.1% of the outstanding shares of Company common stock. At the effective
time of the merger the Company became obligated to issue: (i) 4,123,219 Shares
for 2,625,000 shares of TRC common stock, and, (ii) 744,500 shares of Series E
Convertible Preferred Stock for 2,000 shares of TRC Class A Preferred Stock,
cancellation of a subordinated debenture held by an officer of TRC, and
termination of an employment agreement held by an officer of TRC. Also pursuant
to the merger, the Company assumed all options to purchase shares of the common
stock of TRC, with the number and price thereof being adjusted to reflect the
exchange ratio used in the merger. Accordingly, in the merger Purchaser received
the Shares and options disclosed above.
In connection with the merger, the board of directors of the Company was
changed to consist of William J. Gallagher, who remains on the Board after
serving as a director of the Company prior to the merger, and Mr. Clyde E. Culp,
III, Mr. Richard E. Tanner, and Mr. James R. Walker, all of whom were directors
of TRC. In addition, former officers of TRC became officers of the Company as
follows: Mr. Clyde E. Culp, III became the Chairman and Chief Executive Officer,
Mr. Robert J. Hoffman became the Senior Vice President for Operations, and Mr.
Timothy R. Robinson became the Chief Financial Officer.
<PAGE>
Item 5. Interest in the Securities of the Issuer
(a) Purchaser beneficially owns 736,289 Shares of the Company, including
(i) the right to acquire 353,419 Shares at an exercise price of $.16 per share,
held by Purchaser in his individual capacity; and, (ii) 382,870 Shares held by
Brookhaven Capital Corporation, of which Purchaser is Chairman, over which
Shares Purchaser has voting and investment control. Accordingly, Purchaser
beneficially owns approximately 8.6% of the outstanding Shares.
(b) Purchaser has the sole power to vote and to direct the disposition of
382,870 Shares and has the right to acquire 353,419 Shares at an exercise price
of $.16 per share.
(c) Purchaser acquired the Shares he beneficially owns on January 14, 1999.
(d) Purchaser's Shares are pledged to Sirrom Capital Corporation to secure
the Company's repayment of its $2,000,000 loan from Sirrom Capital Corporation,
which loan was made pursuant to a Loan Agreement between the Company and Sirrom
Capital Corporation dated October 22, 1996.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Purchaser's Shares are pledged to Sirrom Capital Corporation to secure the
Company's repayment of its $2,000,000 loan from Sirrom Capital Corporation,
which loan was made pursuant to a Loan Agreement between the Company and Sirrom
Capital Corporation dated October 22, 1996.
Purchaser has agreed with the Company to vote his Shares in favor of two
proposals to amend the Company's articles of incorporation: (i) to increase the
number of authorized shares from 20,000,000 to not less than 100,000,000, and
(ii) to change the name of the Company to " Tanner's Restaurant Group, Inc."
Item 7. Material to Be Filed as Exhibits
Exhibit A Agreement and Plan of Merger dated December 27, 1998, by and
among the Company, Hartan, Inc. and TRC (filed as Exhibit 2.1 to
the Company's Report on Form 8-K filed January 21, 1999 and
incorporated herein by reference).
Exhibit B Letter Agreement with the Company to vote in favor of amendments.
Exhibit C Stock Pledge Letter, dated January 14, 1999.
Exhibit D Pledge and Security Agreement, dated October 22, 1996.
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated: January 25, 1999
/s/ John D. Feltman
-----------------------------------
Name: John D. Feltman
EXHIBIT B
---------
AGREEMENT
---------
This Agreement (the "Agreement"), dated December 19, 1998, is by and
between Harvest Restaurant Group, Inc., a Texas corporation ("Harvest"), and the
undersigned holder of shares of common stock of Harvest.
Recitals:
The undersigned shareholder desires to evidence such shareholder's
agreement to vote the shares of Common Stock of Harvest that such shareholder
owns (collectively, the "Shares") in favor of an amendment to Harvest's articles
of incorporation that will increase the number of authorized shares of Harvest
Common Stock to not less than 100,000,000.
It is anticipated that such a proposed amendment will be presented to the
shareholders of Harvest for their approval pursuant to a definitive proxy
statement mailed to all holders of Harvest capital stock entitled to vote
thereon.
The investors in the Series D Preferred Stock of Harvest to be issued
concurrently with the merger of TRC Acquisition Corporation into Hartan, Inc., a
wholly-owned subsidiary of Harvest, are relying upon, among other things, this
Agreement in agreeing to invest in Harvest.
Agreement:
In consideration of the foregoing, the undersigned shareholder hereby
agrees to vote all of such holder's Shares in favor of any proposal to amend the
Articles of Incorporation of Harvest to increase the number of authorized shares
of Common Stock to an amount not less than 100,000,000. SHAREHOLDER:
Brookhaven Capital Corporation
By: /s/ John D. Feltman
-------------------------------------
Signature
December 19, 1998 John D. Feltman, Chairman
- ----------------- -------------------------
Date Name: Please Print
HARVEST RESTAURANT GROUP, INC.
January 14, 1999 By: /s/ Timothy R. Robinson
- ---------------- -------------------------------------
Date Name: Timothy R. Robinson
Title: Chief Financial Officer
EXHIBIT C
---------
STOCK PLEDGE LETTER
-------------------
January 14, 1998
Sirrom Capital Corporation
500 Church Street
Suite 200
Nashville, Tennessee 37219
Gentlemen:
Reference is made to that certain Pledge and Security Agreement (the
"Pledge Agreement"), dated October 22, 1996, between Brookhaven Capital
Corporation (the "Shareholder") and you pursuant to which Shareholder has
pledged to you 382,870 shares (the "Shares") of the undersigned as security for
obligations of Hartan, Inc. to you under that certain Loan Agreement, dated
October 22, 1996, between TRC Acquisition Corporation and you (the "Loan
Agreement"). Defined terms used herein which are not otherwise defined shall
have the meaning set forth in the Pledge Agreement.
The undersigned hereby acknowledges and confirms that the necessary changes
and registrations on the books of the undersigned have been made to reflect the
pledge of the Shares under the Pledge Agreement. In particular, the undersigned
acknowledges and confirms that you have been designated as the only registered
pledgee of the Shares.
This letter shall continue in full force and effect until all Obligations
have been paid and/or satisfied.
HARVEST RESTAURANT GROUP, INC.
By: Clyde E. Culp, III
Title: Chairman and CEO
EXHIBIT D
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
THIS PLEDGE AND SECURITY AGREEMENT ("Agreement"), dated October 22, 1996,
by and between BROOKHAVEN CAPITAL CORPORATION, a Georgia corporation ("Pledgor")
and SIRROM CAPITAL CORPORATION, a Tennessee corporation, with its principal
office and place of business in Nashville, Tennessee ("Lender");
WITNESSETH:
-----------
WHEREAS, pursuant to a Loan Agreement of even date herewith, by and between
TRC ACQUISITION CORPORATION, a Georgia corporation ("Debtor"), and Lender (the
"Loan Agreement"), Lender has made a loan to Debtor in the original principal
amount of $2,000,000 (the "Loan"). Capitalized terms used but not defined herein
shall have the meaning ascribed thereto in the Loan Agreement.
WHEREAS, it is a condition of Lender's agreement to make the
above-described extension of credit to Debtor that Pledgor execute and deliver
this Agreement to Lender.
WHEREAS, Pledgor desires to execute and deliver this Agreement to Lender in
order to induce Lender to make the above described extension(s) of credit, which
will be to the direct interest, advantage and benefit of Pledgor.
AGREEMENT:
----------
NOW THEREFORE, in consideration of the foregoing, and to enable Debtor to
obtain loans and other extensions of credit from Lender and to induce Lender to
have transactions with Pledgor and Debtor, Pledgor agrees as follows:
1. Pledge. As collateral security for the payment and performance in full
of the Obligations (as hereinafter defined), Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto Lender, and hereby
grants to Lender a security interest in, the collateral described in Schedule A
hereto, together with (i) all other shares of stock of Debtor of any class or
category, which are now or hereafter owned by Pledgor and (ii) the proceeds
thereof and all cash, additional securities or other property at any time and
from time to time receivable or otherwise distributable in respect of, in
exchange for, or in substitution for any and all such pledged securities (all
such pledged securities, the proceeds thereof, cash, dividends, additional
securities and other property now or hereafter pledged hereunder are hereinafter
collectively called the "Pledged Securities");
TO HAVE AND TO HOLD the Pledged Securities, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto Lender, its successors and assigns; subject, however, to the
terms, covenants and conditions hereinafter set forth.
<PAGE>
Upon delivery to Lender, the Pledged Securities shall be accompanied by
executed stock powers in blank, stock pledge letters and stock proxies. Each
delivery of certificates for such Pledged Securities shall be accompanied by a
schedule showing the number of shares and the numbers of the certificates
theretofore and then pledged hereunder, which schedule shall be attached hereto
as Schedule A and made a part hereof. Each schedule so delivered shall supersede
any prior schedule so delivered.
2. Obligations Secured. This Agreement is made, and the security interest
created hereby is granted to Lender, to secure full payment and performance of
any and all indebtedness and other obligations of Pledgor and/or Debtor to
Lender, direct or contingent, however evidenced or denominated, and however or
whenever incurred, including without limitation indebtedness incurred pursuant
to any past, present or future commitment of Lender to Pledgor and/or Debtor
(regardless of the class of such future advance), including, without limitation,
the indebtedness evidenced by the Note (collectively the "Obligations").
3. Representations and Warranties. Pledgor hereby represents and warrants
to Lender (a) that Pledgor is the legal and equitable owner of the Pledged
Securities, that Pledgor has the complete and unconditional authority to pledge
the Pledged Securities being pledged by it, and holds the same free and clear of
all liens, charges, encumbrances and security interests of every kind and
nature; and (b) that no consent or approval of any governmental body or
regulatory authority, or of any other party, which was or is necessary to the
validity of this pledge, has not been obtained. Pledgor further represents and
warrants that no part of the proceeds of the Loan will be used to purchase or
carry any "margin stock", as defined in Regulation U of the Board of Governors
of the Federal Reserve System, 12 CFR ss. 221.1 et seq.
4. Registration in Nominee Name; Denominations. After an Event of Default
under the Loan Agreement, Lender shall have the right (in its sole and absolute
discretion) to hold the certificates representing the Pledged Securities in its
own name or in the name of the Pledgor, endorsed or assigned in blank or in
favor of Lender. Pledgor shall deliver to Lender all certificates representing
the Pledged Securities promptly upon receipt by Pledgor. Upon request and
delivery of certificates representing the Pledged Securities to the issuer of
the Pledged Securities, Lender may have such Pledged Securities registered in
the name of Lender or any nominee or nominees of Lender. Lender shall at all
times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.
5. Remedies Upon Default. Upon the occurrence of a default in the payment
or performance of any of the Obligations, or upon the occurrence of a default or
event of default under any other instrument or document now or hereafter further
evidencing, securing or otherwise related to any of the Obligations, or in the
event that any representation or warranty herein shall prove to have been untrue
when made, or in the event that Pledgor shall default in the performance of any
of its obligations hereunder, or in the event that any bankruptcy or other
insolvency proceedings are instituted by or against Pledgor or Debtor (subject
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<PAGE>
to the grace and cure provisions set forth in Section 5.1 of the Loan
Agreement); then, and in any such event, Lender shall have all of the rights,
privileges and remedies of a secured party under the Uniform Commercial Code as
in effect in the State of Tennessee, and without limiting the foregoing, Lender
may (a) collect any and all amounts payable in respect of the Pledged Securities
and exercise any and all rights, privileges, options and remedies of the holder
and owner thereof, and (b) sell, transfer and/or negotiate the Pledged
Securities, or any part thereof, at public or private sale, for cash, upon
credit or for future delivery as Lender shall deem appropriate, including
without limitation, at Lender's option, the purchase of all or any part of said
securities at any public sale by Lender. Upon consummation of any sale, Lender
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Pledged Securities so sold. Each such purchaser at any
such sale shall hold the property sold absolutely, free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay or appraisal that Pledgor now
has or may at any time in the future have under any rule of law or statute now
existing or hereinafter enacted. Pledgor hereby expressly waives notice to
redeem and notice of the time, place and manner of such sale.
6. Application of Proceeds. The proceeds of the sale of Pledged Securities
sold pursuant to Section 5 hereof, and the proceeds of the exercise of any of
Lender's other remedies hereunder, shall be applied by Lender as follows:
First: To the payment of all costs and expenses incurred by Lender in
connection with any such sale, including, but not limited to, all court costs
and the reasonable fees and expenses of counsel for Lender in connection
therewith, and
Second: To the payment in full of the Obligations, first to accrued
interest and thereafter to the unpaid principal amount thereof, to the extent
not previously paid by Pledgor, and
Third: The excess, if any, shall be paid to Pledgor or any other person
lawfully thereunto entitled.
7. Reimbursement of Lender. Pledgor agrees to reimburse Lender, upon
demand, for all actual and reasonable expenses, including without limitation
reasonable attorney's fees, incurred by it in connection with the administration
and enforcement of this Agreement, and agrees to indemnify Lender and hold it
harmless from and against any and all liability incurred by it hereunder or in
connection herewith, unless such liability shall be due to willful misconduct or
gross negligence on the part of Lender.
8. No Waiver. No failure on the part of Lender to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by Lender preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. All remedies are cumulative and are not
exclusive of any other remedies provided by law.
3
<PAGE>
9. Limitation of Lender Liability. Except in the case of their intentional
malfeasance or gross negligence, neither Lender nor its partners, employees,
agents, representatives, or nominees shall be liable for any loss incurred by
Pledgor arising out of any act or omission of Lender, its partners, employees,
agents, representatives or nominees, with respect to the care, custody or
preservation of the Pledged Securities.
10. Binding Agreement. This Agreement and the terms, covenants and
conditions hereof shall be binding upon and inure to the benefit of the parties
hereto and to all holders of indebtedness secured hereby and their respective
successors and assigns.
11. Governing Law; Amendments. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of Tennessee
applicable to contracts to be wholly performed in such state. This Agreement may
not be amended or modified, nor may any of the Pledged Securities be released
except in a writing signed by the party to be charged therewith. Time is of the
essence with respect to the obligations of Pledgor pursuant to this Agreement.
12. Further Assurances. Pledgor agrees to do such further acts and things,
and to execute and deliver such additional conveyances, assignments, agreements
and instruments, as Lender may at any time request in connection with the
administration and enforcement of this Agreement or relative to the Pledged
Securities or any part thereof or in order to better assure and confirm unto
Lender its rights and remedies hereunder.
13. Jurisdiction and Venue. Pledgor hereby consents to the jurisdiction of
the courts of the State of Tennessee and the United States District Court for
the Middle District of Tennessee, as well as to the jurisdiction of all courts
from which an appeal may be taken from such courts, for the purpose of any suit,
action or other proceeding arising out of any of its obligations arising under
this Agreement or with respect to the transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any of such
courts.
14. Waiver of Trial by Jury. LENDER AND PLEDGOR HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION, PROCEEDINGS, CLAIMS OR COUNTER- CLAIMS, WHETHER IN CONTRACT OR
TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT.
15. Headings. Section numbers and headings used herein are for convenience
only and are not to affect the construction of or to be taken into consideration
in interpreting this Agreement.
4
<PAGE>
IN WITNESS WHEREOF, Pledgor and Lender have executed this Agreement, or
have caused this Agreement to be duly executed by a duly authorized officer, all
as of the day first above written.
PLEDGOR:
WITNESS:
BROOKHAVEN CAPITAL
CORPORATION
/s/ Jackie Cole By: /s/ John D. Feltman
- ------------------------- --------------------------------------
Title: Chairman
--------------------------------------
LENDER:
SIRROM CAPITAL CORPORATION, a
Tennessee corporation
By: /s/ Treasurer
--------------------------------------
Title: Treasurer
-------------------------------------
5
<PAGE>
SCHEDULE A
Pledged Securities
================================================================================
No. of
Issuer Shares Class Certificate
- --------------------------------------------------------------------------------
1. TRC Acquisition Corporation 243,750 Common 1
================================================================================
6
